Analysts at JP Morgan calculated that the “least bad outcome” for Bunnings-owner Wesfarmers would be to pull out of its fledgling UK operations.

Last month, Wesfarmers said the division had racked up interim losses of £97m, and faced a £454m impairment charge relating to its acquisition of Homebase in 2015.

The JP Morgan report claims it would be “extremely difficult to undo the damage done to Homebase under Wesfarmers’ ownership”.

It evaluates three possible scenarios: a UK exit, remaining in the UK, and a part solution of retaining Bunnings stores but selling off the remaining Homebase estate.

It concludes that the cost of Bunnings exiting the UK and Ireland – an estimated £631m – would be less than the cost of persevering – around £863.4m.

“The least-bad outcome is exit,” analyst Shaun Cousins said.

If the firm does abort its UK operations, leading to the closure of around 240 Homebase and Bunnings stores, JP Morgan predicts that rivals B&Q and Wickes would enjoy respective 4% and 6% sales uplifts.

Bunnings UK & Ireland, with a fresh leadership team in tow, is in the process of carrying out a strategic review of the mission as it attempts to turn its fortunes around.

Wesfarmers is expected to unveil the outcome of its review on June 7, but there is speculation that this may be delayed after unprecedented freezing weather caused footfall in all retail destinations to plummet.